MSE News: Budget 2012: Single state pension plan confirmed

dach

I'm 65 in October 2016 what will happen if I defer taking my state pension for a year?

JoeCrystal

dach wrote: »

I'm 65 in October 2016 what will happen if I defer taking my state pension for a year?

Been asked before and you would still get the old system amount. Not the new one.

Cheers,
Joe

Old_Slaphead

gadgetmind wrote: »

OK, so you might not gain, but you got to retire earlier than we will and you accumulated S2P far faster than anyone has over the last few years.

As it happens, I think I will be a loser under the new system but I still think it's a good idea.

Depends how old you are.

If I lost say £37pw x 25 years = £48100 excl inflation.

That's equivalent to 9 years pension.

I'm not aware that SPA is being increased to 74 for the forseeable future.

Jaycee_Dove

Another group who will lose out badly is low earning women self employed with very small savings due to retire in the next four years. The closer they are to 2017 the less the argument that they get to retire earlier applies. But their pension is likely to be £40 pw less for life than identical retirees maybe just days after them.

That is some cliff face!

zagfles

Errata wrote: »

Current state pension £107 plus, say, annual increase of 1% for next 4 years = not very much.

Plus SERPS/S2P/graduated pension/pension credit, plus getting it at a younger age.

Errata

zagfles wrote: »

Plus SERPS/S2P/graduated pension/pension credit, plus getting it at a younger age.

If there is no serps/sp2/gp and the pensioner is not eligible for pension credit because they have an annuity pension and some savings, they're stuffed and will lose out by a considerable amount each and every week.
This anomaly has already been noticed and commented on all over the place. They become second class pensioners.

zagfles

SnowMan wrote: »

The worked examples are quite interesting.

My immediate thought is that the calculation of the Foundation Amount is going to be key to many individuals, especially those approaching SPA, in working out how they are affected by the changes.

In particular how the contracted-out deduction is made in calculating the Foundation Amount and how the valuation under the existing rules is calculated.

Yes it says nothing about how the COD is calculated, other than subtracting a "rebate derived amount" with no clue about how it's calculated.

In all it does seem to be very good news for those who've been in contracted out schemes, because they'll be able to earn additional state pension even if they already have 35 years, to make up for the COD, whereas those who have 35 years of contracted-in employment won't be able to earn any extra state pension at all as they already have the max, so any further NI contributions will get them nothing. This really is the most blatent unfairness in the white paper.

zagfles

Errata wrote: »

If there is no serps/sp2/gp and the pensioner is not eligible for pension credit because they have an annuity pension and some savings, they're stuffed and will lose out by a considerable amount each and every week.
This anomaly has already been noticed and commented on all over the place. They become second class pensioners.

I suspect there are incredibly few people who get a full basic pension but no SERPS/S2P, or benefits from a contracted-out plan (which would also be deducted from the flat rate pension), and no pension credit.

ETA: other than perhaps the self-employed

zagfles

BLB53 wrote: »

I seem to recall that not so long ago, people (men?) over 60 who were no longer working received automatic NI credits until age 65.

As I will come into this category soon but have only 32 yrs qualifying years built up so far, these credits would take me over the 35 years for the full new state pension.

This is being phased out, see http://www.pensionsadvisoryservice.org.uk/state-pensions/national-insurance-credits

Think it's roughly in line with the increased women's pension age.

zagfles

Jaycee_Dove wrote: »

Another group who will lose out badly is low earning women self employed with very small savings due to retire in the next four years. The closer they are to 2017 the less the argument that they get to retire earlier applies. But their pension is likely to be £40 pw less for life than identical retirees maybe just days after them.

That is some cliff face!

Yes, but there was a bigger cliff face in 2010 with the changes then, which likely affected far more people, where those reaching state pension age on 5 April needed 44 years NI contributions whereas those retiring on 6 April only needed 30!